FUZZY-LOGICAL APPROACH TO CONSTRUCTING AN INTEGRAL INDICATOR IN A LEVEL ESTIMATION MODEL SIGNIFICANT MARKET ADVANTAGE

Valentin Myachin () and Olena Yudina ()
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Valentin Myachin: Ukrainian State University of Chemical Technology, Ukraine
Olena Yudina: Dnipro Humanitarian University, Ukraine

Baltic Journal of Economic Studies, 2021, vol. 7, issue 2

Abstract: The purpose of this research is to construct fuzzy expert system to estimate an integral degree of market concentration by fuzzy-logical approach. The methodological basis of the study consists of scientific works of domestic and foreign scientists and leading specialists, statistical and analytical materials of state authorities. Fuzzy Inference is introduced for the integrated indicator construction. Two indicators are chosen as input variables. The first indicator, CR, is a level of concentration ratio. The second indicator, HHI, is the Herfindahl-Hirschman index. Output variable, MC indicator, means a degree of market concentration. Both input and output variables are transformed to fuzziness through the construction of membership function. The function type and parameters are substantiated and "bell"-shaped membership function to describe uncertainty of the values falling under normal distribution is chosen. The quantity of fuzzy sets at every input is considered z=3 and the quantity of input variables is considered ω=2. To achieve completeness of the model, the quantity of logic rules is considered r=3²=9. To calculate a degree of market concentration, Mamdani fuzzy conclusion is applied. Defuzzification is engaged to calculate value of the output variable which is MC indicator to mean a degree of market concentration and therefore readiness to implement the innovation strategy for enterprises active in innovation. To estimate a degree of market concentration, the fuzzy expert system given allows for engagement of different indicators due to fuzzy logic methodology which considers fuzziness of the input and output variables. The construction of an integral indicator for assessing the state of economic competition in order to establish the feasibility of identifying operators and providers with a significant market advantage will improve the assessment of the state of economic competition in the market in the telecommunications services market in Ukraine.

Keywords: monopolization of the market; market concentration coefficient; the Herfindahl-Hirschman index; fuzzy expert system; fuzzy logic; membership function; defuzzification (search for similar items in EconPapers)
JEL-codes: B21 B41 C65 D41 D42 D43 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bal:journl:2256-0742:2021:7:2:16

DOI: 10.30525/2256-0742/2021-7-2-139-145

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